If I open a CD will the APY go up every year or is it stuck at a fixed rate?

Answer 1

poster one and two took the words right out of mouth!!!! if you think the interest is going to go up ladder your cds == instead of one 5k cd for 5 years buy 5 cds which expire either year limit being 1 year 2 year 3 year etc!!!!

Answer 2

A CD has a fixed rate for a fixed term. (ie 4.9%apy for 6 months) When the CD comes to maturity (ie at the end of 6 months) you have a 'grace period' where you can act on the CD however you choose (ie add, withdraw monies from the CD.) If you miss the grace period, the CD will roll into the same term (ie another 6month cd) at whatever rate the bank is giving.

That being said, you should ALWAYS look for the best rate when yr CD comes to fruition.

Example: I open you a 9 month CD at 5.25%APY today. August rolls around, and the bank is offering a 8 month CD promo at 5%APY, but the 9 month CD is offering 2%APY.
If you do not change the CD, and allow it to roll, you will get the 2% CD.

Answer 3

On a CD, the interest is typically defined when you open it up. It will usually renew automatically at the end of the term unless you tell them not to - the interest rate on the renewal will be whatever it is at that time at that institution, for that amount and for that length of time.